mom and i sold houses together for over 22 years, until she retired in 2015. i have kept on selling houses. for sellers who are moving on, and to buyers who are moving in. real estate is such a part of our daily lives, that it carries over into everything we are. and it is of interest to so many people. so i thought i would start talking. who knows...i may actually find that i have something interesting to say :) www.tkmomteam.com

Millennials Flock to Low Down Payment Programs

A recent report released by Down Payment Resource shows that 65% of first-time homebuyers purchased their homes with a down payment of 6% or less in the month of January.
The
trend continued through all buyers with a mortgage, as 62% made a down
payment of less than 20%, which is consistent with findings from
December.
An article by DS News points to the new wave of millennial homebuyers:

“It
seems that the long-awaited influx of millennial home buyers is
beginning. Ellie Mae reported that mortgages to millennial borrowers for
new home purchases continued their ascent in January, accounting for 84
percent of closed loans.”

Among millennials who purchased homes in January, FHA loans remained popular, making up 35% of all loans closed. Ellie Mae’s Executive Vice President of Corporate Strategy Joe Tyrrell gave some insight into why:

“It
is not surprising to see Millennial borrowers leverage FHA loans
because they typically offer lower down payments and lower average FICO
score requirements than conventional loans. Across the board, we're
continuing to see strong interest in homeownership from this younger
generation.”

Bottom Line

If
you are one of the many millennials who is debating a home purchase
this year, let's get together to help you understand your options and
set you on the path to preapproval.

Tuesday, April 25, 2017

Careful…Don’t Get Caught in the Rental Trap!

There are many benefits to homeownership. One of the top benefits
is being able to protect yourself from rising rents by locking in your
housing cost for the life of your mortgage.

Don’t Become Trapped

Jonathan Smoke, Chief Economist at realtor.com, reported on what he calls a “Rental Affordability Crisis.” He warns that,

“Low
rental vacancies and a lack of new rental construction are pushing up
rents, and we expect that they’ll outpace home price appreciation in the
year ahead.”

In the Joint Center for Housing Studies at Harvard University's 2016 State of the Nation’s Housing Report, they revealed that “The number of cost-burdened households roseto 21.3 million. Even more troubling, the number with severe burdens (paying more than 50% of income for housing) jumped to a record 11.4 million.” These households struggle to save for a rainy day and pay other bills, such as food and healthcare.

It’s Cheaper to Buy Than Rent

In Smoke’s article, he went on to say,

“Housing
is central to the health and well-being of our country and our local
communities. In addition, this (rental affordability) crisis threatens
the future value of owned housing, as the burdensome level of rents will
trap more aspiring owners into a vicious financial cycle in which they
cannot save and build a solid credit record to eventually buy a home.”“While
more than 85% of markets have burdensome rents today, it’s perplexing
that in more than 75% of the counties across the country, it is actually
cheaper to buy than rent a home. So why aren’t those unhappy renters
choosing to buy?”

Know Your Options

Perhaps you have already saved enough to buy your first home. HousingWirereported that analysts at Nomura believe:

"It’s
not that Millennials and other potential homebuyers aren’t qualified in
terms of their credit scores or in how much they have saved for their
down payment.It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream home. As we have reported before,
in many areas of the country, a first-time home buyer can save for a 3%
down payment in less than two years. You may have already saved enough!

Bottom Line

Don’t
get caught in the trap so many renters are currently in. If you are
ready and willing to buy a home, find out if you are able. Let’s get
together to determine if you can qualify for a mortgage now!

Monday, April 24, 2017

Why Millennials Choose to Buy [INFOGRAPHIC]

Some Highlights:

“The majority of
millennials said they consider owning a home more sensible than renting
for both financial and lifestyle reasons — including control of living
space, flexibility in future decisions, privacy and security, and living
in a nice home.”

At 93%, the top reason Millennials choose to buy is to have control over their living space.

Many
Millennials who rent a home or apartment prior to buying their own
homes dream of the day that they will be able to paint the walls
whatever color they'd like, or renovate an outdated part of their living
space.

Thursday, April 20, 2017

The 'REAL' News about Housing Affordability

Some industry experts are claiming that the housing market may be
headed for a slowdown as we proceed through 2017, based on rising home
prices and a potential jump in mortgage interest rates. One of the data
points they use is the Housing Affordability Index, as reported by the National Association of Realtors(NAR).
Here is how NAR defines the index:

“The
Housing Affordability Index measures whether or not a typical family
earns enough income to qualify for a mortgage loan on a typical home at
the national level based on the most recent price and income data.”

Basically,
a value of 100 means a family earning the median income earns enough to
qualify for a mortgage on a median-priced home, based on the price and
mortgage interest rates at the time. Anything above 100 means the family
has more than enough to qualify.
The higher the index, the easier it is to afford a home.

Why the concern?

The
index has been declining over the last several years as home values
increased. Some are concerned that too many buyers could be priced out
of the market.But, wait a minute…
Though the index
skyrocketed from 2009 through 2013, we must realize that during that
time, the housing crisis left the market with an overabundance of
distressed properties (foreclosures and short sales). All prices dropped
dramatically and distressed properties sold at major discounts. Then,
mortgage rates fell like a rock.
The market is recovering, and values are coming back nicely. That has caused the index to fall.
However, let’s remove the crisis years (shaded in gray) and look at the current index as compared to the index from 1990 – 2008:
Though
prices and rates appear to be increasing, we must realize that
affordability is composed of three ingredients: home prices, interest
rates, and income. And, incomes are finally rising.ATTOM Data Solutions recently released their Q1 2017 U.S. Home Affordability Index. The report explained:

“Stronger
wage growth is the silver lining in this report, outpacing home price
growth in more than half of the markets for the first time since Q1
2012, when median home prices were still falling nationwide. If that
pattern continues, it will help turn the tide in the eroding home
affordability trend.”

Tuesday, April 18, 2017

Again… You Do Not Need 20% Down to Buy NOW!

A survey by Ipsos found
that the American public is still somewhat confused about what is
required to qualify for a home mortgage loan in today’s housing market.
There are two major misconceptions that we want to address today.

1. Down Payment

The
survey revealed that consumers overestimate the down payment funds
needed to qualify for a home loan. According to the report, 40% of
consumers think a 20% down payment is always required. In actuality,
there are many loans written with a down payment of 3% or less.
Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO® Scores

The survey also revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality, the average FICO® scores of approved conventional and FHA mortgages are much lower.
The
average conventional loan closed in February had a credit score of 752,
while FHA mortgages closed with a score of 686. The average across all
loans closed in February was 720. The chart below shows the distribution
of FICO® Scores for all loans approved in February.

Bottom Line

If
you are a prospective buyer who is ‘ready’ and ‘willing’ to act now,
but are not sure if you are ‘able’ to, let’s sit down to help you
understand your true options.

Monday, April 17, 2017

Consumer Confidence in Economy & Housing is Soaring

The success of the housing market is strongly tied to the
consumer’s confidence in the overall economy. For that reason, we
believe 2017 will be a great year for real estate. Here is just a touch
of the news coverage on the subject.

“U.S.
consumers are the most confident in the U.S. economy in 15 years,
buoyed by the strongest job market since before the Great Recession. The
survey of consumer confidence rose…according to the Conference Board,
the private company that publishes the index. That’s the highest level
since July 2001.”

Ivy Zelman, in her recent Z Report, probably best capsulized the reports:

"The results were incredibly strong and…offer one of the most positive consumer takes on housing since the recovery started.”

Wednesday, April 12, 2017

Looking to Move-Up to a Luxury Home? Now’s the Time!

If your house no longer fits your needs and you are planning on
buying a luxury home, now is a great time to do so! We recently shared data from Trulia’s Market Mismatch Study which showed that in today’s premium home market, buyers are in control.
The
inventory of homes for sale in the luxury market far exceeds those
searching to purchase these properties in many areas of the country.
This means that homes are often staying on the market longer, or can be
found at a discount.
Those who have a starter or trade-up home to
sell will find buyers competing, and often entering bidding wars, to be
able to call your house their new home.
The sale of your starter
or trade-up house will aid in coming up with a larger down payment for
your new luxury home. Even a 5% down payment on a million-dollar home is
$50,000.
But not all who are buying luxury properties have a home to sell first.
In a recent Washington post article,
Daryl Judy, an associate broker with Washington Fine Properties, gave
some insight into what many millennials are choosing to do:

“Some
high-earning millennials save money until they are in their early 30s
to buy a place and just skip over that starter-home phase. They’ll stay
in an apartment until they can afford to pay for the place they want.”

Bottom Line

The
best time to sell anything is when demand is high and supply is low. If
you are currently in a starter or trade-up house that no longer fits
your needs, and are looking to step into a luxury home… Now’s the time
to list your house for sale and make your dreams come true.

Tuesday, April 11, 2017

Millionaire to Millennials: Buy Now!

Self-made millionaire David Bach was quoted in a CNBC article explaining that "the single biggest mistake millennials are making" is not purchasing a home because buying real estate is "an escalator to wealth.”

Bach went on to explain:

"If millennials don't buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter."

In his bestselling book, “The Automatic Millionaire,” Bach does the math:

"As a renter, you can easily spend half a million dollars or more on rent over the years ($1,500 a month for 30 years comes to $540,000), and in the end wind up just where you started — owning nothing. Or you can buy a house and spend the same amount paying down a mortgage, and in the end wind up owning your own home free and clear!"

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

He has been a contributor to NBC’s Today Show appearing more than 100 times, has been a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS, and has been profiled in many major publications, including The New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, The Washington Post, The Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.

Friday, April 7, 2017

Renting or Buying… Either Way You’re Paying a Mortgage

There are some people who have not purchased homes because they are
uncomfortable taking on the obligation of a mortgage. Everyone should
realize that, unless you are living with your parents rent-free, you are
paying a mortgage - either yours or your landlord’s.
As Entrepreneur Magazine, a premier source for small business, explained this month in their article, “12 Practical Steps to Getting Rich”:

“While
renting on a temporary basis isn't terrible, you should most certainly
own the roof over your head if you're serious about your finances. It
won't make you rich overnight, but by renting, you're paying someone else's mortgage. In effect, you're making someone else rich.”

Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With
a 30-year fixed rate mortgage, you’ll have the certainty &
stability of knowing what your mortgage payment will be for the next 30
years – unlike rents which will continue to rise over the next three
decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ which
allows you to build equity in your home that you can tap into later in
life. As a renter, you guarantee the landlord is the person with that
equity.
Interest rates are still at historic lows, making it one
of the best times to secure a mortgage and make a move into your dream
home. Freddie Mac’s latest report shows that rates across the country were at 4.23% last week.

Bottom Line

Whether
you are looking for a primary residence for the first time or are
considering a vacation home on the shore, now may be the time to buy.

Thursday, April 6, 2017

Which Homes Have Appreciated the Most?

Home values have risen dramatically over the last twelve months. The latest Existing Home Sales Report from the National Association of Realtors puts the annual increase in the median existing-home price at 7.1%. CoreLogic, in their most recent Home Price Insights Report, reveals that national home prices have increased by 6.9% year-over-year.
The CoreLogic report broke down appreciation even further into four different price categories:

Lower Priced Homes: priced at 75% or less of the median

Low-to-Middle Priced Homes: priced between 75-100% of the median

Middle-to-Moderate Priced Homes: priced between 100-125% of the median

High Price Homes: priced greater than 125% of the median

Here is how each category did in 2016:

Bottom Line

The lower priced homes (which are more in demand) appreciated at greater rates than the homes at the upper ends of the spectrum.

Wednesday, April 5, 2017

The Foreclosure Crisis: 10 Years Later

CoreLogic recently released a report entitled, United States Residential Foreclosure Crisis: 10 Years Later, in which they examined the years leading up to the crisis all the way through to present day.
With
a peak in 2010 when nearly 1.2 million homes were foreclosed on, over
7.7 million families lost their homes throughout the entire foreclosure
crisis.
Dr. Frank Nothaft, Chief Economist for CoreLogic, had this to say,

“The
country experienced a wild ride in the mortgage market between 2008 and
2012, with the foreclosure peak occurring in 2010. As we look back over
10 years of the foreclosure crisis, we cannot ignore the connection
between jobs and homeownership. A healthy economy is driven by jobs
coupled with consumer confidence that usually leads to homeownership.”

Since
the peak, foreclosures have been steadily on the decline by nearly
100,000 per year all the way through the end of 2016, as seen in the
chart below.
If this trend continues, the country will be back to 2005 levels by the end of 2017.

Bottom Line

As
the economy continues to improve, and employment numbers increase, the
number of completed foreclosures should continue to decrease.

Tuesday, April 4, 2017

A Tale of Two Markets: Inventory Mismatch Paints a More Detailed Picture

The inventory of existing homes for sale in today’s market was recently reported to be at a 3.6-month supply according to the National Association of RealtorslatestExisting Home Sales Report. Inventory is now 7.1% lower than this time last year, marking the 20th consecutive month of year-over-year drops.
Historically,
inventory must reach a 6-month supply for a normal market where home
prices appreciate with inflation. Anything less than a 6-month supply is
a sellers’ market, where the demand for houses outpaces supply and
prices go up.
As you can see from the chart below, the United
States has been in a sellers’ market since August 2012, but last month’s
numbers reached a new low.
Recently Truliarevealed
that not only is there a shortage of homes on the market in general,
but the homes that are available for sale are not meeting the needs of
the buyers that are searching.
Homes are generally bucketed into three groups by price range: starter, trade-up, and premium.Trulia’s
market mismatch score measures the search interest of buyers against
the category of homes that are available on the market. For example: “if
60% of buyers are searching for starter homes but only 40% of listings
are starter homes, [the] market mismatch score for starter homes would
be 20.”
The results of their latest analysis are detailed in the chart below.
Nationally,
buyers are searching for starter and trade-up homes and are coming up
short with the listings available, leading to a highly competitive
seller’s market in these categories. Ninety-two of the top 100 metros
have a shortage in trade-up inventory.
Premium homebuyers have the
best chance of less competition and a surplus of listings in their
price range with an 11-point surplus, leading to more of a buyer’s
market.

“It leaves Americans who are in the market
for a home increasingly chasing too fewer options in lower price
ranges, and sellers of premium homes more likely to be left waiting
longer for a buyer.”

Lawrence Yun, NAR’s Chief Economist doesn’t see an end to this coming any time soon:

“Competition
is likely to heat up even more heading into the spring for house
hunters looking for homes in the lower- and mid-market price range.”

Bottom Line

Real
estate is local. If you are thinking about buying OR selling this
spring, let’s get together to discuss the exact market conditions in
your area.

Monday, April 3, 2017

Mortgage Interest Rates Went Up Again… Should I Wait to Buy?

Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Freddie Mac, along with Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors, is calling for mortgage rates to continue to rise over the next four quarters.
This
has caused some purchasers to lament the fact they may no longer be
able to get a rate below 4%. However, we must realize that current rates
are still at historic lows.
Here is a chart showing the average mortgage interest rate over the last several decades.

Bottom Line

Though
you may have missed getting the lowest mortgage rate ever offered, you
can still get a better interest rate than your older brother or sister
did ten years ago, a lower rate than your parents did twenty years ago,
and a better rate than your grandparents did forty years ago.

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About Me

i am a mom. and a wife. and a realtor. when i grow up i want to spend all day taking pictures and then spend all night looking at them. in the meantime, i am going to keep selling houses. for sellers who are moving on, and to buyers who are moving in. real estate is such a part of our daily lives, that it carries over into everything we are. and it is of interest to so many people. so i thought i would start talking. who knows...i may actually find that i have something interesting to say :)